Andy Wales, SABMiller's head of sustainable development, spells out the increasing challenges — and opportunities — of doing business in a world where precious resources are becoming more scarce.

A splash causing air bubbles in water.
(Photo: Olga Nikonova/Shutterstock)

The theme of this year’s World Water Day is Water and Food Security, and its aim is to encourage us all to be more aware of the amount of water we "drink" through the food we eat — for example, producing 1 kilogram of beef uses 15,000 liters of water while 1 kilogram of wheat "drinks" 1,500 liters.

At SABMiller, we have been working over the last few years to improve our understanding of the water footprint of our beers. That’s because water is not only a vital component of beer and soft drinks, but is also required for the cultivation of crops needed for the production process. As water scarcity becomes more apparent, then so do the risks potentially facing our business.

In 2009, we published, in partnership with WWF (also known as World Wildlife Fund), the first ever corporate water footprint, looking at the overall value chain impact of our operations in South Africa and the Czech Republic. You can see the report here.

Resource scarcity has been a hot topic for many years. Talk of oil reserves running out has been going since the '70s, about losing the rain forests since the '80s and about water scarcity for about five years. But we can’t treat these as individual issues any more; they are all connected.

This World Water Day, I would challenge you to not only think about the connections between water and food, but also how energy fits in. This is what is increasingly being termed the water-food-energy nexus.

To grow food at the volumes we need to feed the world’s increasing population, we need huge amounts of energy going into fertilizers and distribution, and we lots of water — 70 percent of the world’s water supply.

To have clean water, we need energy to treat and pump it. And we need to make sure that food production doesn’t pollute our water systems.

But to have energy we need water to cool our generation systems. And if biofuels are to be a successful source of clean energy, we need to find ways of growing them in much more water- and energy-efficient ways.

So bringing that together ,the challenge is this: to grow and process more food to meet the demands of a growing population; do so with the same water resources we use now, and despite higher energy demands, in a much lower carbon way.

Companies have a huge opportunity to reduce the resources used to make each of these products. And the good news is that many companies are doing just that. There is a great deal going on below the surface that many people don’t yet see. SABMiller will, in our own operations, become 25 percent more water efficient by 2015 and 50 percent more carbon efficient by 2020.

This means that, on a global scale, we will be able to grow our output — providing a beer at the end of a hard-working day to many of the predicted 3 billion extra middle-class consumers — without adding to the environmental impact of our own operations.

So you can see the water-food-energy nexus playing out in a positive way as the brewing industry becomes more efficient. The more water-efficient we become as we brew and package beer, the less liquid we have to heat and cool — which means we need less energy. The more we can use waste materials such as spent grains and wastewater to generate renewable energy, the less fossil energy we need to use.

In fact, there are many positive feedback loops within the nexus. Companies across food and beverage, consumer goods, chemicals, engineering and many other sectors are making great efficiency gains and targeting even more. Through setting these targets and considering how we will meet them, companies often find hidden value they hadn’t realized was there — operating cost savings they might otherwise not have found.

Of course just doing this within our own operations is not enough — global companies are now pushing these targets down into their supply chains — and this will have a big impact.

But to improve resource efficiency in our supply chains, we need help, especially from governments. Government departments work in silos — often with water, food and energy policy set with no or little regard to each other. For example, the agriculture department might say that it will double land under irrigation to maintain food security, whilst the water department says there is no more water available for irrigation; the energy department is promoting a huge biofuel plantation which will need irrigation, and climate change will mean there is less water available overall. All of those things simply cannot happen at once, and government departments must start working together.

But even working up and down the value chain is not enough. Companies also need to work laterally to build broad coalitions to tackle the local food-water-energy nexus. And this is where the role of NGOs or non-government organizations is critical — to help us build collaborations to tackle major resource challenges.

Here are three examples:

The Water Futures Partnership is a collaboration between SABMiller, WWF and the German development agency (GIZ) where we work with other NGOs such as The Nature Conservancy across eight markets — from Peru to South Africa to India — to protect the watersheds our business depends on. We can only do that if we recognize that the watershed also needs to be protected for the local community to have a sustainable supply, and for ecology to be protected.

Meanwhile the World Economic Forum has a new vision for an agriculture project which is developing major, on-the-ground agricultural growth partnerships in Tanzania, Vietnam and Mexico, targeting increased yields with much lower water and energy inputs.

Finally, the Water Resources Group is a coalition of consumer goods companies, with the leadership of the International Finance Corporation, to assist governments to understand how water can drive energy and food security.

If we can get each of these partnerships — and many others like them — to scale, then we will have begun to tackle the challenge of delivering a higher quality of life whilst respecting and managing the resources we have.

Andy Wales is global SVP for sustainable development for SABMiller.

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